NEW DELHI: The banking industry has sought relief from the Supreme Court from the double blow dealt to it by Covid pandemic. First, it depressed financial activities and second, Debt Recovery Tribunals (DRTs) have remained shut for more than two months due to lockdown, seriously impeding recovery of dues.
Kotak Mahindra Bank, through senior advocate V Giri, told a bench of Chief Justice S A Bobde, Justices A S Bopanna and Hrishikesh Roy on Friday that non-availability of DRTs and Debt Recovery Appellate Tribunals (DRATs) during lockdown denied the banking and financial institutions the essential forum for recovery of their dues under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Securitisation and Recovery of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.
The bench issued notice to the Centre and asked the bank to give a copy of the petition to solicitor general Tushar Mehta. “We want to know about the functioning of DRTs and DRATs,” the bench asked the Centre.
The bank’s petition also raised the issue of snail-paced process in the DRTs and DRATs because nearly half of the presiding officers’ posts are lying vacant. “At present, 18 of the 39 DRTs across the country do not have permanent presiding officers, and also lack competent quasi-judicial and judicial staff,” it said.
The bank said while the SC, high courts and even district courts have provided for video-conference hearing of urgent matters to mitigate hardship in the absence of regular judicial forums, DRTs and DRATs have made no provision for facilitating e-hearing of urgent debt recovery matters which the banks want to be adjudicated.
It said though e-filing facility has been provided at only five DRTs at Delhi, Kolkata, Dehradun, Mumbai and Chennai, no facility is being given for urgent hearing of these matters, thus preventing the banks and financial institutions from getting interim relief.
“Adjudication of debt recovery cases by DRTs and DRATs are critical for the stability of banking and financial institutions and, by extension, the economic health of the country,” it said.
The petitioner feared that absence of urgent adjudication of debt recovery cases could lead to an increase in the number of NPAs in the books of the bank. “Because of delay in disposal of matters, the value of the mortgaged assets held by the petitioner bank rapidly deteriorates resulting in a drastically reduced recovery. Extremely delayed recoveries of debts adds to the problem of liquidity and reduces the lending capacity and/or willingness to lend,” Kotak Mahindra said.